Once Again, AHCA Changes to Medicaid Are Not “Cuts”

One month ago today I was forced to defend President Trump’s terrible budget proposal (that has not and will never pass) against charges that it cuts Medicare, Medicaid, and Social Security. It doesn’t, obviously. It lowers their growth rates, but still leaves them almost doubling in spending over 10 years. That’s not a cut. And neither are the American Health Care Act’s changes to Medicaid.

The much more drastic changes in the Senate bill as compared to the House bill come in the realm of Medicaid. The House bill immediately ended enhanced funding for the Medicaid expansion to able-bodied low-income adults under the ACA, while the Senate bill would slowly phase that funding out. This, in theory, would put millions fewer people immediately in the ranks of the uninsured and increase government spending over the House plan. But seven states (Arkansas, Illinois, Indiana, Michigan, New Hampshire, New Mexico, and Washington) have “trigger laws” that would immediately void their Medicaid expansions with any change in federal support, and it’s likely more states would choose to shutter their expansions well before the end of the enhanced funding window in the face of rising costs.

The House’s plan also restructured the open-ended funding of Medicaid to a per-capita cap scheme, where states receive a capped amount of funding each year per enrollee, and could choose to receive the funding up front in block grants. That Medicaid restructuring increased yearly funding by the medical Consumer Price Index plus 1 percent, a measure designed to keep per-capita caps roughly in line with inflation in the industry, but one that would also underfund Medicaid over time, leading to a growing gap between the number of patients who would be eligible under current guidelines, and the funds available to pay for their care.

Several independent analyses have concluded that this funding structure would lead to large-scale shortfalls in every state, which would need to be closed by reducing enrollment or benefits, and cutting capacity to respond to disasters and public-health crises. Those affected most would be poor children, people with mental-health issues, and disabled people.

Nothing described in this analysis is a spending cut. In fact, they specifically describe the mechanism that would be used to increase spending every year. The debate is over whether that increase is enough to cover everyone, not whether it is an increase or decrease. So calling it a “cut” is at best misleading.

Neither the House nor Senate plans reverse existing Medicaid expansion plans in the states. They only keep new states from expanding theirs and end funding for new non-disabledenrollees in the expanded income brackets.

However, The Atlantic further worries about state trigger laws that would reverse Medicaid expansions if changes are enacted at the federal level. While that would indeed be a blow to enrollees in those states, that’s not the House or Senate GOP’s fault. If Democrats took back Congress and passed a bill to increase Medicaid spending, coverage, or enrollment, the same thing would’ve happened. These mostly-blue states that passed those laws might have considered that first.

Finally, we get the heart-string tug of the “hardest hit” scenario under the AHCA’s non-cuts. While it is emotionally effective and quantitatively true to say that “poor children, people with mental-health issues, and disabled people” will be affected most, it’s also redundant. Medicaid primarily serves “poor children, people with mental-health issues, and disabled people”, so any changes to the program will necessarily affect them. That it will affect poor adults, the only other group served by the program, slightly less should not be a winning argument in a rational political debate.